Logo of Phnom Penh Post newspaper Phnom Penh Post - Local NGO used in 'boiler room' scam

Local NGO used in 'boiler room' scam

Local NGO used in 'boiler room' scam

TWENTY foreign nationals arrested on July 15 on suspicion of illegal share dealing

and operating an illegal international telephone gateway used a local NGO as a front

for their scam. The NGO's former secretary-general told the Post that he handed the

organization over to them without undertaking any reference checks whatsoever.

The foreign nationals have been released pending an investigation, but the Cambodian

national, who signed the NGO deal, was still in custody. A senior immigration official

said Poli J Men would be charged soon.

The passports of the foreigners, most of whom are UK nationals, are being held until

the investigation into their dealings is concluded. Chief prosecutor Khut Sopheang

said he could not comment on any charges being brought.

"The result of the investigation is not clear yet so I cannot say," he

said. "There are as yet no charges against the 20 foreigners."

The immigration official said the men were still being questioned to determine who

the ringleader was, and whether any senior officials at the Ministry of Post and

Telecommunications (MPTC) were involved.

Keo Ya, lawyer for all 21 suspects, said his clients were no longer under suspicion

for operating unlicensed financial markets.

"They were accused of only one crime: making international calls illegally,"

he said.

It seems the men were running a 'boiler room' share scam operation, where investors

are duped into buying the stocks of non-existent companies. It is unclear whether

that is an offense here since there is no stock exchange.

However, one foreign lawyer based here surmised that the banking law could be broad

enough to make a case against them. The telecoms law, though, clearly outlawed illegal

gateways.

Chem Sangva, deputy director of the MPTC investigation team, said the group had been

operating since June 26. Long distance calls made to Hong Kong, the UK and other

European countries had cost the government approximately $27,000.

"They operate financial markets without the permission of the [finance ministry],"

he said. "They said were an NGO called the Cambodian Rehabilitation and Development

Program (CRDP) ... but it was a cover for the financial operation inside the building."

The Post has determined that CRDP is a local NGO that has been active for the past

three years. The NGO's former secretary-general, who wished to remain anonymous,

said he "gave it away" to two men on June 13.

"Some people came here to see me [and] said they were with a university research

project. They asked how they could start doing this in Cambodia to attract funds

and donations," he explained. "I said: 'If this is true, I will give you

the NGO.'"

The man claimed this altruistic gesture was based on trust, and said no money changed

hands. However he admitted he did not checked their credentials: "How can I

check? There was no money involved, no transactions involved. I just gave it away.

I thought it is better if the NGO can work and do good for Cambodia. Why should I

suspect otherwise?"

He said the two men visited him around June 11. One was the accused Khmer national

Men, while the other, he thought, was called Paul and came from England or Canada.

A June 13 letter obtained by the Post specifies that 'all interests, duties and rights

be transferred as from this date hereto' to Men, whose fingerprint appears at the

end of the document.

Men said he had no idea about illegal operations at CRDP, and thinks his business

partner deceived him.

"I was accused of operating the international phone calls illegally. Actually,

I don't understand. I have the internet system connected legally. I firmly believe

that it is not my mistake," he said. "It could be two things: I could have

been cheated by Paul, or I was treated badly by a person who wants to compete with

me."

The mysterious 'Paul' is believed to have fled to Bangkok after the probe began.

Authorities said they were still investigating his disappearance.

Lawyer Keo Ya told the Post that if Men paid the government the revenue that was

lost, all charges would be dropped against his 21 clients. The immigration official

rejected that, and said Men would likely go to court by July 19.

MOST VIEWED

  • Diplomatic passports issued to foreigners to be annulled

    The Ministry of Foreign Affairs and International Cooperation will move to annul diplomatic passports issued to those not born in Cambodia. Analysts say the move may be in relation to reports that former Thai prime minister Yingluck Shinawatra used a Cambodian passport to register as

  • Hun Sen warns Irish MP of EBA ‘mistake’

    Prime Minister Hun Sen on Saturday told former Irish premier Enda Kenny, still a member of the EU nation’s parliament, that the 28-nation bloc should not make a “third mistake” regarding Cambodia by using the preferential Everything But Arms (EBA) agreement to “take 16 million

  • The hairy little heroes saving many lives in rural Cambodia

    IN RURAL Siem Reap province, rats dare to tread where no person will, as these hairy little heroes place their lives on the line each day for the good of the local community. The rodents are the most important members of a special team, leading

  • PM warns EU and opposition on 34th anniversary of his rule

    HUN Sen reached the milestone of 34 years as Cambodian prime minister on Monday and used the groundbreaking ceremony for a new ring road around Phnom Penh to tell the international community that putting sanctions on the Kingdom meant killing the opposition. “Please don’t forget